Moly still project hunting

Back in March, Moly Mines placed its $1.1 billion molybdenum plans on the backburner, put $127 million on the table and went shopping.

The plan: to pick up a project either in production or close to production, which it could focus on until both the debt market and molybdenum prices improved.

Finding an asset that was close to producing cash was particularly a key for Moly, which hoped to use it as leverage to refinance about $US150 million ($191 million) of debt with US lender Trust Company of the West by October 31.

At the time managing director Derek Fisher said he expected to make an acquisition within three months. That deadline fell due just over two weeks ago with no acquisition in sight.

Moly has been looking very closely at several possible projects, including the assets of collapsed would-be miner Windimurra Vanadium, but there are signs the group is looking for its plan B a little closer to home.

Several key things have changed over the past three months.

Firstly, molybdenum prices are on the rise, up about 50 per cent over the period, having fallen from $US30 a pound last year to as low as $US7/lb earlier this year. Secondly, global markets have rebounded and, with them, investor appetite for (at least a certain degree of) risk.

Both of these factors suggest Moly may not have to keep its Spinifex Ridge molybdenum project on the sidelines for as long as planned.

That in turn makes the third point - that the iron ore market is starting to look attractive again - all the more critical because, in addition to molybdenum, Moly also has iron ore at Spinifex Ridge.

The resource is a small one - 7.3 million tonnes as it stands, which may double under more drilling but is unlikely to get much bigger than that.

However, Moly's great advantage is that it's close, only about 170km, to Port Hedland. If it can get space at the harbour it could truck its ore to the port and load it.

Talks over space at Port Hedland have begun, as have discussions with potential customers.

Mr Fisher faces a crucial three months in which to make a decision about whether to fast-track Moly's iron ore plans, pick up another project, or both.

All of which must be decided well before October 31 to hope to convince Trust Company of the West to roll over or restructure its debt.

-Mark Ashley's gold miner, Apex Minerals, took the wraps off the small print at Wiluna last week and the numbers look promising.

On track to hit its target of 120,000 ounces a year after a good June quarter, the WA miner has put cash costs at $750 an ounce. With gold prices still topping $1000/oz in Australian dollar terms, that gives it a healthy enough margin. Every additional 1000oz produced each month should see those costs drop by about $40/oz.

-Chinese allegations of bribery among Rio Tinto executives have thrown a new light on doing business with China Inc and its impact on Australia's mining sector has yet to be measured.

Among those in the process of structuring a Chinese alliance is Australasian Resources and its would-be funding partner Shougang.

The Clive Palmer-controlled Australasian indicated on Friday it could be another week before negotiations over funding for Balmoral South at Cape Preston are completed. The situation is doubly complicated after a Shougang executive was also arrested in China last week for what local media called alleged "commercial crimes", although whether it is in connection to the Rio detentions remains unclear.